Yesterday’s Autumn Budget delivered by Chancellor Rachel Reeves marked the first Labour Budget in over a decade. With the ongoing pressures of the cost of living, mortgage rates, and energy bills, this budget has been highly anticipated, especially for those buying or selling homes. According to Rightmove’s insights, these announcements will shape the property market in key ways for buyers, sellers, and investors alike.
Mortgage Rates Remain a Challenge
One of the primary concerns in recent times has been mortgage affordability. Rightmove reports that average first-time buyer mortgage payments have increased by £350 over the past five years, and high rates persist with no major relief in sight from this budget. Despite hopes for a decrease, mortgage rates remain at levels that could impact buyers’ purchasing power.
What this means for you: For those looking to buy, especially first-time buyers, it’s essential to explore mortgage options thoroughly. Working with an experienced mortgage broker who understands your budget and can guide you through these conditions is invaluable.
We work with an excellent whole of market mortgage broker who can access exclusive deals from lenders whom we can connect you with. For more information please contact us.
Increased Support for Affordable Housing
A positive takeaway from the Budget is Labour’s commitment to a £5 billion housing plan, including a £500 million boost to the Affordable Homes Programme. The government aims to deliver 3,000 energy-efficient new homes nationwide, focusing on affordability with the help of a £25 million investment.
What this means for you: This boost could increase the availability of affordable homes over time, helping more first-time buyers get on the property ladder. It also aligns with the public’s call for more support for first-time buyers, as highlighted in Rightmove’s recent survey of over 34,000 people.
Stamp Duty Surcharges and Changes
The budget left existing stamp duty reliefs untouched but indicated that these temporary benefits would expire in March 2025. Importantly, starting 31 October 2024, the stamp duty surcharge for those buying second homes will increase from 3% to 5%. For an average-priced property, this could mean an additional £7,000 for landlords or those purchasing additional properties, according to Rightmove.
What this means for you: If you’re a first-time buyer or someone considering an additional property, the timing of your purchase is critical. Current stamp duty thresholds will drop by 2025, which could significantly increase upfront costs. Buyers looking to save on stamp duty should consider accelerating their plans, given that it currently takes an average of 152 days to complete a purchase once a sale is agreed.
Capital Gains Tax Remains Unchanged
Anticipated changes to Capital Gains Tax (CGT) on rental properties were a hot topic leading up to the budget. However, the government has decided to leave CGT unchanged, bringing relief to landlords who had feared increased taxes on profits from property sales. This follows a wave of landlords selling properties earlier this year due to rumours of CGT hikes.
What this means for you: If you’re a landlord or investor, there’s a window to maintain current CGT rates on sales. For landlords considering selling their properties, it’s a good time to review options and market conditions before any future changes.
Property Market Trends and Price Sensitivity
Rightmove highlights a strong autumn season for home movers, with sales agreements up by 29% compared to last year and enquiries to estate agents rising by 17%. There’s also an increase in property choices, with 12% more homes available for sale. However, market price growth was subdued at 0.3%, much lower than the seasonal average of 1.3%.
What this means for you: The property market is active, but buyers are becoming more price-sensitive. Sellers should consider setting realistic asking prices to secure interest. Consult with your estate agent for advice on pricing competitively in a market that’s currently seeing an uptick in demand but limited growth in property prices.
The Road Ahead
For home buyers, sellers, and landlords the Autumn Budget has brought a mix of certainty and opportunities. As you navigate these changes, staying informed and acting sooner rather than later could help you optimise your property transactions. Remember that while press updates on the market can be useful, the guidance of a local estate agent is often the most up-to-date source available, especially when market trends shift as quickly as they are now.
If you are thinking of moving and would like to discuss the best options for you please contact us on 01780 672030.
Source(s): Rightmove